Philippines Exchange Rate January 2016

Philippines: Philippine peso weakens to over-five-year low

January 20, 2016

In January, the Philippines peso (PHP) weakened against the U.S. dollar, continuing a trend that began in mid-May 2015. On 20 January, the currency traded at 47.87 PHP per USD, which represented the weakest value in over five years. The result was 1.2% weaker than on the same day of the previous month and 7.4% weaker on an annual basis.

The peso’s depreciation was driven by several factors. On the one hand, it reflects that the U.S. dollar is strengthening on the back of monetary tightening in the U.S. Adding to this, recent financial market turmoil in China lowered investors’ appetite for emerging market currencies. Nevertheless, the peso performed relatively well compared to many other emerging market currencies, mainly thanks to the Philippine economy’s resilience to international headwinds and solid remittances inflows.

Met the why particular Consensus Forecast panelists expect the Philippines peso ending this year at 48.2 PHP per USD. Next year, the panel sees the currency trading at 48.0 PHS per USD.

Philippine exports contracted in November, after 12 months of expansions, mainly on the back of plummeting demand from Japan and a notable decrease in overseas orders to the United States and China, which more than offset stronger demand from Hong Kong and Singapore.